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Content
THE
KENTUCKY
BANKER November 2010
Annual Convention Wrap-up p. 12-13
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Board
Officers Pedro Bryant KBA Chairman Louisville Community Development Bank Louisville Tony Whitaker KBA Vice Chair First Federal Savings and Loan Association Hazard David Heintzman KBA Treasurer Stock Yards Bank and Trust Company Louisville Garland Certain KBA Past Chairman United Community Bank of West Kentucky Morganfield Ballard W. Cassady, Jr. KBA President & CEO
Timothy Barnes- Group 7 Hometown Bank of Corbin, Inc. Corbin Robert Zapp- Group 8 The Bank of Kentucky, Inc. Crestview Hills Hugh Mitchell- Group 9 1st Trust Bank, Inc. Hazard
BANK SIZE REPRESENTATIVES Luther Deaton Central Bank Lexington David Hale, The First Capital Bank of Kentucky Louisville EDUCATION ALLIANCE REPRESENTATIVE Lanie W. Gardner First National Bank of Muhlenberg County Central City PEC REPRESENTATIVE Fred Brashear, II Hyden Citizens Bank Hyden
STAFF
Ballard W. Cassady, Jr.
Cover Colors
THRIFT REPRESENTATIVES William H. Johnson Central Kentucky Federal Savings Bank Danville William James First Federal Bank Lexington Michael Lonnemann Home Savings Bank, FSB Ludlow
Group Representatives R. Bruce Kimbell- Group 1 First Community Bank Clinton Chris Reid- Group2 Independence Bank of KY Owensboro Margaret Ann Wells- Group 3 Commonwealth Bank & Trust Company Louisville Owen Lambert- Group 4 South Central Bank Glasgow Neil Bryan- Group 5 Farmers Bank of Milton Milton George Spragens- Group 6 The Farmers National Bank of Lebanon Lebanon
Management Team
CONTENTS Photo shot by Elizabeth Jones for the 2010 Scenes of Kentucky Photo Contest
COLUMNS
Straight Talk.................................7
Departments Products and Services................. 10 Education...................................16 Making News..........................18-19 On the Move.............................. 21 Upcoming Events........................ 22
Tammy J. Nichols
Convention & Member Services Coordinator
President & CEO
and Accounting Assistant
Debra K. Stamper
Yvonne Savage
General Counsel & Executive Vice President
PAC Services Coordinator
Paula B. Cravens
Audrey H. Whitaker
Director of Education Alliance
Insurance Services/Education Coordinator
Selina O. Parrish
Steve Whitlow
Director of Membership
Information Systems Engineer
7
Features
12
Annual Convention Wrap-Up....12-15
Matthew E. Vance Chief Financial Officer
CONSULTANTS John P. Cooper
STAFF
22
Governmental Affairs
Miriam Cole Executive Assistant
KENBANC INSURANCE SERVICES, INC
Kyle Elmore
Chuck Maggard
Marketing/Communications Coordinator
CEO
Jamie Hampton
Bill Busby
Education Services Coordinator
General Agent
Natalie Kaelin
Mark Wooley
Assistant General Counsel
General Agent
Michelle Madison
Randy Proffitt
Database/Web Operations Coordinator
Special Agent
Lanie Minton
Audrey Whitaker
Administrative Assistant
Assistant
November 2010 | 3
Chairman’s Corner The PAC Needs Us All The Kentucky Bankers Association’s Political Action Committee needs the support of bankers from the entire Commonwealth of Kentucky. There are 210 banks that are members of the KBA and we need to have representation in the form of contributions from officers, directors and employees from all 210 banks. This is the time when we need to have a participation rate of 100%. The financial crisis of 2008 and the ensuing credit crisis has lead to the most sweeping regulatory reform in my 27 year banking career. Very few industries if any, garner the level of media attention and public scrutiny as banking, especially in recent years. Bankers must remain engaged in the process of shaping regulation and policy as it impacts our industry. As we
are fast approaching the end of 2010 we must resolve to make a commitment to provide our PAC with the resources it needs to advocate on our behalf. Our industry is constantly going through some sort of change and normally runs through Frankfort and Washington. The KBA PAC is a non-partisan political action committee organized by members of the Kentucky Bankers Association to benefit the entire banking industry through political contributions to candidates for federal and state elected positions. While banks are not permitted to make contributions to the PAC, employees, officers and directors are encouraged to support the PAC. The KBA PAC allows us to support candidates for the Kentucky Legislature as well
as the United States Senate and House of Representatives whose views and positions on banking issues are compatible with the interest of our industry. We need the support of bankers representing all 210 banks. Can you imagine the message it would send to candidates for office and others if we could say that our PAC raised $300,000 or $500,000? We bear a great responsibility as bankers to do all that we can for the interests of our stakeholders. We know our customers because they are our neighbors and friends. Support for our PAC provides us with the opportunity to influence the future of our industry and banking in Kentucky.
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A joint venture between FAHE & VCDC
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November 2010 | 4
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Straight Talk Dodd-Frank Testimony in Frankfort At the specific request of the Kentucky Interim Joint Banking and Insurance committees, Debra and I testified at their meeting held on October 26, 2010, regarding the probable consequences of the Dodd-Frank Act on Kentucky community banking. This provided us with a ideal opportunity to speak on your behalf to key legislators in Frankfort, much like September’s meeting with Senator Mitch McConnell. These opportunities are very important and we have to be sure we make the most of them. When writing the testimony it was difficult to hold back my anger and frustration. I am, we all are, angry at the outcome of this bill, but we remember that occasions such as this testimony create the sparks that ignite the fires of necessary modification and help to shape how the new law goes into effect. With the amount of new faces set to hit Washington in January (thanks to a historic election night in terms of turnover), it is more important than ever to make sure that our voice is heard in Congress and in Frankfort. To help ensure that we are all on the same page, I want to reiterate what I told the legislators in Frankfort during the KBA testimony. These are the same messages that we should all look to echo to our local legislators and our congressmen and women and senators alike over the next several months. Regulation is Necessary, but the Passed Regulations Missed Their Mark I think we all understand that regulation was necessary following the economic “perfect storm” that struck our country in the fall of 2008. Our problem with the passed legislation is that it failed to indentify and address the real causes of our economic collapse. Rather, it has punished community banks like those in
Kentucky who had no part in creating the mess to begin with. Kentucky bankers are not opposed to logical and fair regulations; we just want the new regulations to address the real problems that plague the financial industry, i.e. the shadow lending industry and firms gambling with depositor’s money- none of which are the actions or motives of Kentucky banks. Kentucky Banks are/were Not Part of the Problem We must also make it clear that Kentucky banks were not part of the problem, but we are committed to being part of the solution. All Kentucky banks are considered community banks, as defined in Washington, and our banks are integral catalysts for community growth and are time-tested foundations for community stability. The average Kentucky Banker Association member bank has been in existence for 80 years, over half have been around for more than 100 years, supporting and growing their communities. Legislators must understand how important each and every one of our member banks is to their respective community’s prosperity.
The Unintended Consequences Threaten Bank Stability The Dodd-Frank Act has many potential unintended consequences for traditional banks like those in Kentucky. The most direct negative impacts will derive from the increased compliance and regulatory burdens and the costs associated. The worst thing about all of the bill’s unintended consequences is that rarely do we know their true impact until it’s too late. Studies have concluded that 5,000 new pages of regulations will be promulgated as a result of Dodd-Frank, in addition to the already 50 new regulations that were promulgated during the two years prior to FinReg. The cost alone of complying with these new regulations threatens the stability and well-being of Kentucky banks. It is ironic that the new regulations were intended to make sure that banks were more stable, yet they are directly compromising the stability of community banks across the Commonwealth and country. This is a point we must make sure to echo to our politicians in both Frankfort and Washington- Kentucky banks cannot afford to pay for others’ sins. continued on next page...
The $10 Billion Question We must also clarify the confusion regarding the $10 billion exemption. No matter a bank’s size, they will be required to comply with new regulation set by the CFPB and this is not commonly understood in Washington or Frankfort. The new law clearly states that there are no exceptions for smaller banks; rather, all banks will be subject to the CFPB’s ruling power if they deem it necessary. The CFPB’s reach and power is unchecked and is dangerous to the free market system.
which play to call in the huddle? That is the confusion that our bankers will come to know as the CFPB comes to power and circumvents banks established regulatory body. Our banks will be caught in a government agency power struggle with Kentucky banks standing to lose the most. This power struggle will also threaten the stability of the whole industry and thus the growth of our nation. The last thing we need during a time like now is to hinder economic growth and stability due to a governmental budget dog fight.
Regulating Agencies Tug -o -War There is a power struggle brewing between the banking regulatory bodies and it will threaten the stability of the banking industry in both Kentucky and nationally. For example, the OCC may tell a bank that they have to operate one way and the CFPB can direct something completely different. It is like a quarterback being given one play from his offensive coordinator, another play by his head coach and a completely different play call by his quarterbacks coach. How does the quarterback know
While the above summary is not a totality of testimony topics covered during the KBA testimony to the Interim Joint Banking and Insurance committees, it does help reiterate many of the points we must continue to make over the next several months. As you can imagine, we covered a lot of ground regarding the Dodd-Frank act and informed the Committee of just how dangerous the law is to the stability and future of Kentucky banking. The testimony was well received and we were honored to be asked to testify.
I also want to make sure that every banker in Kentucky understands how great of a job both Senator Tom Buford and Congressman Jeff Greer are doing at chairing both the Senate and House Banking and Insurance committees respectively. It is no easy assignment and both men handle the responsibility with intelligence and understanding. The Kentucky Banking and Insurance committees have always acted fairly in matters involving Kentucky banks and I am confident that under the leadership of Senator Tom Buford and Representative Jeff Greer this will continue to be the case. With that said, it is imperative for each of you to develop a relationship with your district’s legislators so that our collective voice can be echoed across the Kentucky Chamber. Opportunities for our voice to be solicited are rare, so it is us up to each and every Kentucky banker to make our collective voice heard from Paducah to PikevilleKentucky’s growth and development depend on it.
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Exiting Chairman’s Article Since I recently completed my term as Chairman of the KBA Board of Directors, I wanted to make some final comments about the year. Needless to say 2009-2010 was a “unique” year for the banking industry. Perhaps the most general troubling fact was/is the uncertainty of the ending effect(s) of what the new regulations will have on each of our institutions. I can honestly say that the year was a learning experience for me. I sincerely enjoyed talking with many Kentucky bankers whether by phone, e-mail, or in person. Naturally, we do not all agree on the best solution(s) to these most difficult situations. One thing we mostly agree upon is that community banking is receiving unwarranted bad publicity and “We’re mad as hell, and we’re not taking it anymore!”
Garland Certain President & CEO United Community Bank of West Kentucky Morganfield
KBA Past Chairman
The large majority (almost 100%) of Kentucky bankers supported the association’s efforts and many were and still are willing to join in the battle. The support of Ballard’s leadership continues to be extremely strong. I can and do affirm that he constantly thinks, works, and acts on behalf of the members of the Kentucky Bankers Association. He has built a strong (perhaps the strongest in the nation) state banking organization which I believe will eventually lead us to an acceptable level of “living with” these regulations. I cannot stress enough the fact that all Kentucky bankers need to stay united and respond to Ballard’s and Debra’s requests to make phone calls, e-mails, or write letters when needed. Also, please do not forget your contributions to KBPAC. This avenue of financial support to “friendly to bankers” candidates or elected officials has never been more important. I’ve observed and listened to several people in Frankfort and Washington who are always complimentary of John Cooper’s
ability to deliver the Kentucky bankers’ messages and positions on each issue! He has their ears! Another important lesson I’ve learned is to keep my directors, management, and staff abreast of what’s happening and how it will affect our bank. This year has been most rewarding to me, both personally and professionally. My wife Kat and I have gotten to meet many wonderful people and developed several new friendships which, hopefully will last for years to come. Similarly, I’ve met many successful, knowledgeable bankers who made deep impressions upon me which will help me run a better bank. Kentucky’s great performance as an industry (20 years without a failure) falls back on these individuals and their predecessors. I have mixed feelings about the termination of serving as your chairman as I’ve been honored; however, I strongly believe that it’s time for the next person to enjoy the position. Pedro Bryant will be a strong leader of our association and I look forward to working with him and the entire KBA board. In closing, may I share the final paragraph of “A Prayer for Bad Times” by Richard Cardinal Cushing in which he paralleled a sporting event to the game of life. “And when I finish the final inning, I ask for no laurels. All I want is to believe in my heart that I played as well as I could and that I didn’t let you down.”
Garland Certain
November 2010 | 9
PRODUCTS AND SERVICES America 2010: The Latest Demographic Trends Each year Bancography updates its software tools and analytic databases with current year demographics in order to most accurately describe the markets our clients serve. And each year, the demographic update reveals interesting trends about the American landscape. Several notable trends emerged in 2010.
Household Growth • Florida is no longer a growth market. As recently as 2007, six of the 25 fastest growing large counties (at least 50,000 households) in the U.S. were in Florida; in 2010 none. America’s onetime growth capital has been supplanted due to reduced immigration, deferred retirement migration (a consequence of eroded retirement savings accounts) and an uncertain real estate market. Taking its place, the Mountain states of Colorado, Utah and Wyoming each show highgrowth forecasts throughout, as do the coastal counties of the Carolinas and Georgia. Among metropolitan areas, Phoenix remains a growth magnet but former hotspots such as Riverside – San Bernardino and Las Vegas have cooled. • Despite Florida’s slowdown, growth expectations remain high in many major Southeast and Southwest metros. Raleigh – Durham, Atlanta and Nashville each rank among the nation’s fastest-growing markets, as do the Texas quartet of Dallas, Houston, Austin and San Antonio. In other regions, the Washington DC suburbs continue to show high growth prospects, hosting four of the15 fastest growing large counties; as do the Seattle and Portland metros in the Northwest. The overall U.S. household base is projected to grow by 4.8% over the next five years, well below the 7% rate that held prior to the economic downturn of 2008. November 2010 | 10
Income • Income remains sharply concentrated along the Northeast corridor, with nearly every county from Washington to Boston ranking among the top 10% of all U.S. counties in terms of affluence. In other parts of the nation, top ranking income levels are found in the San Francisco Bay Area, Portland, Seattle and Denver; in Houston and Dallas; and in the major metros of the Midwest such as Chicago and Minneapolis. Affluence is highly correlated with urbanicity, with most of the lowest-income areas spread across rural areas of the deep South, the Appalachian states and the sparsely populated West Texas – New Mexico region.
Age • America’s heartland continues to age, with the oldest regions spanning the midsection of the country through the Dakotas, Nebraska, Kansas, Oklahoma and central Texas. The coal mining communities of western Pennsylvania and West Virginia also show older household bases; as do traditional retirement hubs such as Florida, the Blue Ridge Mountains and the lakefront towns of northern Michigan. In contrast, western states such as California, Washington, Colorado and Wyoming attract younger household bases, a trait shared with major employment centers such as Atlanta, Chicago, Houston and the Northeast corridor cities.
Minority Population • The traditional U.S. melting pot appears less evident than in prior years, as minority populations remain concentrated in specific regions of the country rather
than spread across the nation. A broad corridor from southern California to Texas contains the nation’s largest Hispanic-American concentrations, while a corridor from the Mississippi Delta through central Alabama, rural Georgia and South Carolina contains the nation’s largest African-American concentrations. Three-hundred and seventy of the 3,141 U.S. counties are now “majority minority,” i.e., non-white residents (including census reporting categories Hispanic, Black, Asian, Aleut, Native American and Pacific Islander) represent more than 50% of residents. This compares to 350 counties in 2007. For detailed maps and tables showing the fastest growing counties, most affluent counties and other interesting 2010 demographic statistics, visit www. bancography.com/bancology.html. And if you need detailed information on your institution’s markets, contact us at info@ bancography.com or 205-252-6671 For More Information on this article and other KBA endorsed products and services, please contact: Selina Parrish 502.582.2453 [email protected]
119th Annual Convention Wrap-up
By: Kyle Elmore
Bankers, guests and vendors joined together at the French Lick Resort from September 18-20 to take part in the KBA’s 119th Annual Convention. The convention was packed full of dynamic speakers, informative presentations and plenty of networking opportunities. Highlights included having both Ted Koppel and Stuart Varney speak on the same day, within 8 hours of one another. It is unique to have one speaker as great as either Mr.Varney or Mr. Koppel, but two in the same day is unbelievable. The convention also saw a new chairman, Pedro Bryant, take the reins and attendees witnessed the introduction of the new KBA board members. The convention had many phenomenal speakers in addition to Mr. Koppel and Mr.Varney. Mitch Barnhart, University of Kentucky Athletic Director, made the opening remarks for the prayer breakfast. Walter Bond taught the crowd how to quit throwing pity parties and a wide range of speakers covered many hot topic issues inside the banking industry today. The convention again had a member roundtable segment that allowed attendees to interact with their peers regarding the state of the industry and give feedback to the KBA directly. The convention was once again a huge success. The KBA cannot wait to see everyone next year in Destin. November 2010 | 12
WHO’S HELPING YOU THROUGH IT? On top of a slow economy, banks now face a maze of new regulations and requirements. The Financial Institutions Services Team at Mountjoy Chilton Medley LLP specializes in helping you find your way through it all so you can stay in compliance and in the black. Call us today to see how we can help your institution.
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FRANKFORT
GOLF
Opening Reception
Prayer Breakfast
Exhibit Hall
Thank You 2010 Annual Convention Sponsors Affinion Group Alexander, Thompson, Arnold, CPAs Anthem Blue Cross Blue Shield Kentucky Arison Insurance Services, Inc. ATM Solutions, Inc. The Baker Group Baldwin CPAs, PLLC KY Banker BancInsure, Inc. TIB adNOV.Bancography 2010 7.5 xBank 5 On Hold The Bankers’ Bank of Kentucky, Inc. BBVA Compass
November 2010 | 14
BKD, LLP BSC, Inc. Computer Services, Inc. Crowe Horwath LLP Deluxe Financial Services Dynamic Card Solutions, LLC Federal Home Loan Bank of Cincinnati Fidelity National Information Services Financial Data Technology Corporation Frost Brown Todd LLC FTN Financial Housing Equity Funds of Kentucky
Investors Title Insurance Company Morgan & Pottinger, PSC Morgan Keegan & Company, Inc. Mountjoy Chilton Medley, LLP National Processing Company Norman Backues & Associates, Inc. PNC Bank, N.A. Professional Bank Services, Inc. PULSE Ross, Sinclaire & Associates Software Information Systems, Inc. Southwest Financial Services, Ltd. Stifel, Nicolaus & Company, Inc. TransUnion LLC Travelers
Mark Your Calendar
Sandestin’s naturescape is a sacred trust to be savored. With miles of biking and hiking paths amid a vast range of plantings and vegetation, the ecotourism at Bayside will leave you spellbound. Sandestin Golf and Beach resort features the largest span of bayside property in Northwest Florida, and with Bayside’s stunning area of Destin vacation rentals, the resort is an attention getter.
120th Annual Convention September 24-27, 2011 Sandestin Golf and Beach Resort Simplify a Complicated World! Serving Kentucky Banks for 30 years King + Company, PSC Certified Public Accountants 3400 Dutchmans Lane Louisville, KY 40205
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Directors Chris Fralick, CPA, Russ Harris, CPA, Susan Pike, CPA and Ronnie Harris, CPA
Jim King, CPA, CEO Former KBA Chairman November 2010 | 15
Education Prevent Fraud Before it Happens Fraud Protection – Debit Card and ACH Loss Prevention Seminar November 30, 2010, 9 am – 4 pm, $249 per person Republic Bank and Trust, 9600 Brownsboro Road, Louisville, Kentucky
Please join us as we explore why your sales market is local, but your fraud risk market is global and what this means to the risk management strategies, in both your plastic card portfolio, and the business accounts subject to so many new fraud attempts.
You Can’t Depend on Your Customers to Prevent Losses
The exponential growth in the use of ACH has created fraud losses that occur at break neck speed, and with huge losses. Losses are occurring at banks large and small, rural and metropolitan. No one is immune.You must ask yourself if you have the protections for both the losses, and the legal liabilities.
Operational losses attributable to fraud, specifically debit and payment channel fraud are changing right in front of our eyes, and at a pace that threatens both your accounts and the reputational integrity of your financial institution.
The UCC requires banks to have, among many other provisions “…a commercially reasonable method of providing security against unauthorized payment orders…” The question is “Do You?” Business line portfolios are traditionally viewed as a silo that must be protected, weighing the risks and rewards associated with the marketplace in which you operate. Unfortunately, the Internet and Worldwide trade are changing the rules for everyone. Requiring your customers to protect their accounts is an important part of a risk management strategy, but it must include many layers, including sufficient contracts, and robust fraud detection systems within your bank.
Online registration is available at www.kybanks.com (go to Education, then Seminars).
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Our Goal: Your Success! November 2010 | 16
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Making News Republic Bank Donates Kentucky State Fair Grand Champion Ham to West End School Republic Bank who had the co-winning high bid of $800,000 for the 2010 Kentucky State Fair’s Grand Champion Ham donated the ham to the West End School. In turn, students from the West End School along with community volunteers from Manna House served the ham sandwiches to West End residents on Tuesday, October 19, as part of the weekly community food outreach program. Starting in 2005, the West End School is now a year-round free boarding school serving the academic and residential needs of 13 middle school boys, and is located at the former Carter Elementary School at 36th and Virginia in Louisville’s West End. The West End School was founded to address the need of alternative forms of education particularly for the increas-
November 2010 | 18
ing number of children in our community who are experiencing issues of social dislocation or homelessness. Middle school age students were chosen because they are believed to be at the “tipping point” both academically and socially, and felt that a three year middle school program would provide sufficient time to remediate academic deficiencies. Manna House, located at the West End School, is supported by the New Zion Baptist Church’s Mission Council and other members of the church and serves 30 – 40 members of the community every Tuesday. New Zion Baptist Church is located at 1501 South 34th Street. “As Kentucky’s largest community bank, Republic Bank is committed to the communities in which we work and live. We are, therefore, extremely pleased to present this ham to
the West End School,”,stated Bernard Trager, founder of Republic Bank. “We are proud to partner with Republic Bank, a community-minded company. The actions of their founder, Bernard Trager, are those of a true community leader, and his donation indicates his desire to impact the lives of those in need,” stated Robert Blair, founder and administrator of the West End School. “As a community volunteer, I’ve seen first-hand the work that the West End School has done with these young men. I’m proud that Republic Bank has donated the ham to the West End School and that, in turn, the school is donating the ham to their local community,” stated Amy Trager, volunteer and wife of Steve Trager, Republic Bank’s Chairman and CEO.
First Federal Sponsors Senior Crimestoppers First Federal Bank and the Bluegrass Care and Rehabilitation Center announced today that they have partnered to bring the Senior Housing Crime Prevention Program to the residents of the Center. The Senior Crimestoppers Program provides on-going crime prevention programs designed to deter incidents of crime in long-term care and senior housing facilities. The Program will provide the Center a proven system for further preventing crime against its patients and staff including ongoing education for residents and their families and for staff members, lock boxes for the residents’ personal property and medication, access to an anonymous tip-reporting hotline, and cash rewards for information that could help the facility solve or prevent a crime.
“We do view this partnership as a way for First Federal Bank to give back to the community in a very important way,” stated William W. James, bank president. “Our commitment in this program will help further strengthen the fight against crime perpetrated on the elderly.”
The Senior Housing Crime Prevention Foundation (SHCPF) presented the Charter to Bluegrass Care and Rehabilitation Center, and to First Federal Bank, representing participation of the Center and the Bank in the Program.
“First Federal Bank’s five year commitment to this program demonstrates their belief in giving back to the community that they serve,” said George Clinard, SHCPF Vice President.
Helping Kentucky bankers invest wisely for over 20 years!
Municipals • Agencies • BABS • MBS Bill Barker 800.292.4563 [email protected] Louisville ~ Lexington ~ Cincinnati -KBA Associate MemberNovember 2010 | 19
Community Community Ventures Ventures Corporation’s Corporation’s
SBA 504 Loan Program EXCITING NEW FEDERAL LEGISLATION UPDATES Recent legislation passed by Congress and signed into law by the President adds some exciting enhancements to the SBA 504 Loan Program. • Larger Size Businesses Now Qualify – Businesses with net worth of $15M and less and net income (after federal income taxes) that averages no more than $5M over the last two years are now eligible for 504 loan financing. Previously the thresholds were $8.5M and $3M respectively. • Refinancing of Existing Debt – Community Ventures Corporation, a Certified Development Company, can partner with banks to finance maturing business debt without a business expansion project being associated with the refinancing. This new refinance rule is in effect for two years and the debt being refinanced must have been for a 504 Loan Program qualifying purpose. (Example: purchase of the business’s building) • Fee Relief – Effective October 1, 2010, and through the earlier of December 31, 2010 or when the $505 million (fee relief ) allocation is exhausted, certain fees normally paid by 504 loan borrowers and participating bank partners, are waived. • Higher Lending Limits – Community Ventures Corporation can now lend more money to business expansion and refinancing projects. Community Ventures Corporation’s loan limit (up to 40% of the total project costs) is now $5M. For small manufacturing firms and projects that meet certain energy consumption requirements, Community Ventures Corporation’s lending limit is $5.5M. Community Ventures Corporation can participate in projects as large as $12.5M and in some cases $13.75M on a day-to-day basis. • Benefits of 504 Loans to Banks – When banks partner with Community Ventures Corporation to structure business expansion and refinance deals using the SBA 504 loan, they continue to realize the following benefits:
Banks have a 1st lien position on the collateral; Community Ventures Corporation and SBA will have a 2nd lien position. Bank’s permanent financing facility will be at 50% Loan-to-Value. With the exception of term, Banks can price and structure their 1st lien loan according to their own underwriting guidelines. Banks maintain the business borrower’s deposit relationship (Community Ventures Corporation is not a depository institution.) Bank has no SBA “red tape” to deal with. Community Ventures Corporation handles that exclusively.
• Benefits of 504 Loans to Borrowers – When borrowers partner with Community Ventures Corporation to structure business expansion and refinance deals using the SBA 504 loan, they continue to realize the following benefits:
Low capital injection requirements – Typically it’s 10%, and never higher than 20% Long-term financing – 20 year term on real estate projects; 10 year term on equipment Low fixed interest rate – Current 20-year fixed interest rate is 4.5%!!
Call your local Community Ventures Corporation office today for more information!!
www.cvcky.org
Lexington - 859-231-0054 (Headquarters) 1450 N Broadway; Lexington, KY 40505
Henderson - 270-826-7196 1990 Barrett Ct; Henderson, KY 42419
Bowling Green - 270-904-0323 923 College Street; Bowling Green, KY 42101
Louisville - 502-566-6076 811 S 2nd St; Louisville, KY 40203
Campbellsville - 270-849-2323 107 W Broadway; Campbellsville, KY 42718
Paris - 859-340-4028 509 High St; Paris, KY 40361
Frankfort - 502-696-9444 975 Riverbend Rd; Frankfort, KY 40601
ON THE MOVE
Susan Forsythe
Ryan Atkins
Kentucky Bank adds two new Mortgage Lenders. Susan Forsythe has joined Kentucky Bank’s Lending Department, bringing twentyfive years of mortgage lending experience.
Kevin Welsh
Kevin Welsh has been named to the Kentucky Bank Board of Directors for Clark County, Welsh has has over 23 years of manufacturing experience in Clark County.
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Annual Convention Wrap-up p. 12-13
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Board
Officers Pedro Bryant KBA Chairman Louisville Community Development Bank Louisville Tony Whitaker KBA Vice Chair First Federal Savings and Loan Association Hazard David Heintzman KBA Treasurer Stock Yards Bank and Trust Company Louisville Garland Certain KBA Past Chairman United Community Bank of West Kentucky Morganfield Ballard W. Cassady, Jr. KBA President & CEO
Timothy Barnes- Group 7 Hometown Bank of Corbin, Inc. Corbin Robert Zapp- Group 8 The Bank of Kentucky, Inc. Crestview Hills Hugh Mitchell- Group 9 1st Trust Bank, Inc. Hazard
BANK SIZE REPRESENTATIVES Luther Deaton Central Bank Lexington David Hale, The First Capital Bank of Kentucky Louisville EDUCATION ALLIANCE REPRESENTATIVE Lanie W. Gardner First National Bank of Muhlenberg County Central City PEC REPRESENTATIVE Fred Brashear, II Hyden Citizens Bank Hyden
STAFF
Ballard W. Cassady, Jr.
Cover Colors
THRIFT REPRESENTATIVES William H. Johnson Central Kentucky Federal Savings Bank Danville William James First Federal Bank Lexington Michael Lonnemann Home Savings Bank, FSB Ludlow
Group Representatives R. Bruce Kimbell- Group 1 First Community Bank Clinton Chris Reid- Group2 Independence Bank of KY Owensboro Margaret Ann Wells- Group 3 Commonwealth Bank & Trust Company Louisville Owen Lambert- Group 4 South Central Bank Glasgow Neil Bryan- Group 5 Farmers Bank of Milton Milton George Spragens- Group 6 The Farmers National Bank of Lebanon Lebanon
Management Team
CONTENTS Photo shot by Elizabeth Jones for the 2010 Scenes of Kentucky Photo Contest
COLUMNS
Straight Talk.................................7
Departments Products and Services................. 10 Education...................................16 Making News..........................18-19 On the Move.............................. 21 Upcoming Events........................ 22
Tammy J. Nichols
Convention & Member Services Coordinator
President & CEO
and Accounting Assistant
Debra K. Stamper
Yvonne Savage
General Counsel & Executive Vice President
PAC Services Coordinator
Paula B. Cravens
Audrey H. Whitaker
Director of Education Alliance
Insurance Services/Education Coordinator
Selina O. Parrish
Steve Whitlow
Director of Membership
Information Systems Engineer
7
Features
12
Annual Convention Wrap-Up....12-15
Matthew E. Vance Chief Financial Officer
CONSULTANTS John P. Cooper
STAFF
22
Governmental Affairs
Miriam Cole Executive Assistant
KENBANC INSURANCE SERVICES, INC
Kyle Elmore
Chuck Maggard
Marketing/Communications Coordinator
CEO
Jamie Hampton
Bill Busby
Education Services Coordinator
General Agent
Natalie Kaelin
Mark Wooley
Assistant General Counsel
General Agent
Michelle Madison
Randy Proffitt
Database/Web Operations Coordinator
Special Agent
Lanie Minton
Audrey Whitaker
Administrative Assistant
Assistant
November 2010 | 3
Chairman’s Corner The PAC Needs Us All The Kentucky Bankers Association’s Political Action Committee needs the support of bankers from the entire Commonwealth of Kentucky. There are 210 banks that are members of the KBA and we need to have representation in the form of contributions from officers, directors and employees from all 210 banks. This is the time when we need to have a participation rate of 100%. The financial crisis of 2008 and the ensuing credit crisis has lead to the most sweeping regulatory reform in my 27 year banking career. Very few industries if any, garner the level of media attention and public scrutiny as banking, especially in recent years. Bankers must remain engaged in the process of shaping regulation and policy as it impacts our industry. As we
are fast approaching the end of 2010 we must resolve to make a commitment to provide our PAC with the resources it needs to advocate on our behalf. Our industry is constantly going through some sort of change and normally runs through Frankfort and Washington. The KBA PAC is a non-partisan political action committee organized by members of the Kentucky Bankers Association to benefit the entire banking industry through political contributions to candidates for federal and state elected positions. While banks are not permitted to make contributions to the PAC, employees, officers and directors are encouraged to support the PAC. The KBA PAC allows us to support candidates for the Kentucky Legislature as well
as the United States Senate and House of Representatives whose views and positions on banking issues are compatible with the interest of our industry. We need the support of bankers representing all 210 banks. Can you imagine the message it would send to candidates for office and others if we could say that our PAC raised $300,000 or $500,000? We bear a great responsibility as bankers to do all that we can for the interests of our stakeholders. We know our customers because they are our neighbors and friends. Support for our PAC provides us with the opportunity to influence the future of our industry and banking in Kentucky.
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Straight Talk Dodd-Frank Testimony in Frankfort At the specific request of the Kentucky Interim Joint Banking and Insurance committees, Debra and I testified at their meeting held on October 26, 2010, regarding the probable consequences of the Dodd-Frank Act on Kentucky community banking. This provided us with a ideal opportunity to speak on your behalf to key legislators in Frankfort, much like September’s meeting with Senator Mitch McConnell. These opportunities are very important and we have to be sure we make the most of them. When writing the testimony it was difficult to hold back my anger and frustration. I am, we all are, angry at the outcome of this bill, but we remember that occasions such as this testimony create the sparks that ignite the fires of necessary modification and help to shape how the new law goes into effect. With the amount of new faces set to hit Washington in January (thanks to a historic election night in terms of turnover), it is more important than ever to make sure that our voice is heard in Congress and in Frankfort. To help ensure that we are all on the same page, I want to reiterate what I told the legislators in Frankfort during the KBA testimony. These are the same messages that we should all look to echo to our local legislators and our congressmen and women and senators alike over the next several months. Regulation is Necessary, but the Passed Regulations Missed Their Mark I think we all understand that regulation was necessary following the economic “perfect storm” that struck our country in the fall of 2008. Our problem with the passed legislation is that it failed to indentify and address the real causes of our economic collapse. Rather, it has punished community banks like those in
Kentucky who had no part in creating the mess to begin with. Kentucky bankers are not opposed to logical and fair regulations; we just want the new regulations to address the real problems that plague the financial industry, i.e. the shadow lending industry and firms gambling with depositor’s money- none of which are the actions or motives of Kentucky banks. Kentucky Banks are/were Not Part of the Problem We must also make it clear that Kentucky banks were not part of the problem, but we are committed to being part of the solution. All Kentucky banks are considered community banks, as defined in Washington, and our banks are integral catalysts for community growth and are time-tested foundations for community stability. The average Kentucky Banker Association member bank has been in existence for 80 years, over half have been around for more than 100 years, supporting and growing their communities. Legislators must understand how important each and every one of our member banks is to their respective community’s prosperity.
The Unintended Consequences Threaten Bank Stability The Dodd-Frank Act has many potential unintended consequences for traditional banks like those in Kentucky. The most direct negative impacts will derive from the increased compliance and regulatory burdens and the costs associated. The worst thing about all of the bill’s unintended consequences is that rarely do we know their true impact until it’s too late. Studies have concluded that 5,000 new pages of regulations will be promulgated as a result of Dodd-Frank, in addition to the already 50 new regulations that were promulgated during the two years prior to FinReg. The cost alone of complying with these new regulations threatens the stability and well-being of Kentucky banks. It is ironic that the new regulations were intended to make sure that banks were more stable, yet they are directly compromising the stability of community banks across the Commonwealth and country. This is a point we must make sure to echo to our politicians in both Frankfort and Washington- Kentucky banks cannot afford to pay for others’ sins. continued on next page...
The $10 Billion Question We must also clarify the confusion regarding the $10 billion exemption. No matter a bank’s size, they will be required to comply with new regulation set by the CFPB and this is not commonly understood in Washington or Frankfort. The new law clearly states that there are no exceptions for smaller banks; rather, all banks will be subject to the CFPB’s ruling power if they deem it necessary. The CFPB’s reach and power is unchecked and is dangerous to the free market system.
which play to call in the huddle? That is the confusion that our bankers will come to know as the CFPB comes to power and circumvents banks established regulatory body. Our banks will be caught in a government agency power struggle with Kentucky banks standing to lose the most. This power struggle will also threaten the stability of the whole industry and thus the growth of our nation. The last thing we need during a time like now is to hinder economic growth and stability due to a governmental budget dog fight.
Regulating Agencies Tug -o -War There is a power struggle brewing between the banking regulatory bodies and it will threaten the stability of the banking industry in both Kentucky and nationally. For example, the OCC may tell a bank that they have to operate one way and the CFPB can direct something completely different. It is like a quarterback being given one play from his offensive coordinator, another play by his head coach and a completely different play call by his quarterbacks coach. How does the quarterback know
While the above summary is not a totality of testimony topics covered during the KBA testimony to the Interim Joint Banking and Insurance committees, it does help reiterate many of the points we must continue to make over the next several months. As you can imagine, we covered a lot of ground regarding the Dodd-Frank act and informed the Committee of just how dangerous the law is to the stability and future of Kentucky banking. The testimony was well received and we were honored to be asked to testify.
I also want to make sure that every banker in Kentucky understands how great of a job both Senator Tom Buford and Congressman Jeff Greer are doing at chairing both the Senate and House Banking and Insurance committees respectively. It is no easy assignment and both men handle the responsibility with intelligence and understanding. The Kentucky Banking and Insurance committees have always acted fairly in matters involving Kentucky banks and I am confident that under the leadership of Senator Tom Buford and Representative Jeff Greer this will continue to be the case. With that said, it is imperative for each of you to develop a relationship with your district’s legislators so that our collective voice can be echoed across the Kentucky Chamber. Opportunities for our voice to be solicited are rare, so it is us up to each and every Kentucky banker to make our collective voice heard from Paducah to PikevilleKentucky’s growth and development depend on it.
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7/9/2010 1:59:55 PM
Exiting Chairman’s Article Since I recently completed my term as Chairman of the KBA Board of Directors, I wanted to make some final comments about the year. Needless to say 2009-2010 was a “unique” year for the banking industry. Perhaps the most general troubling fact was/is the uncertainty of the ending effect(s) of what the new regulations will have on each of our institutions. I can honestly say that the year was a learning experience for me. I sincerely enjoyed talking with many Kentucky bankers whether by phone, e-mail, or in person. Naturally, we do not all agree on the best solution(s) to these most difficult situations. One thing we mostly agree upon is that community banking is receiving unwarranted bad publicity and “We’re mad as hell, and we’re not taking it anymore!”
Garland Certain President & CEO United Community Bank of West Kentucky Morganfield
KBA Past Chairman
The large majority (almost 100%) of Kentucky bankers supported the association’s efforts and many were and still are willing to join in the battle. The support of Ballard’s leadership continues to be extremely strong. I can and do affirm that he constantly thinks, works, and acts on behalf of the members of the Kentucky Bankers Association. He has built a strong (perhaps the strongest in the nation) state banking organization which I believe will eventually lead us to an acceptable level of “living with” these regulations. I cannot stress enough the fact that all Kentucky bankers need to stay united and respond to Ballard’s and Debra’s requests to make phone calls, e-mails, or write letters when needed. Also, please do not forget your contributions to KBPAC. This avenue of financial support to “friendly to bankers” candidates or elected officials has never been more important. I’ve observed and listened to several people in Frankfort and Washington who are always complimentary of John Cooper’s
ability to deliver the Kentucky bankers’ messages and positions on each issue! He has their ears! Another important lesson I’ve learned is to keep my directors, management, and staff abreast of what’s happening and how it will affect our bank. This year has been most rewarding to me, both personally and professionally. My wife Kat and I have gotten to meet many wonderful people and developed several new friendships which, hopefully will last for years to come. Similarly, I’ve met many successful, knowledgeable bankers who made deep impressions upon me which will help me run a better bank. Kentucky’s great performance as an industry (20 years without a failure) falls back on these individuals and their predecessors. I have mixed feelings about the termination of serving as your chairman as I’ve been honored; however, I strongly believe that it’s time for the next person to enjoy the position. Pedro Bryant will be a strong leader of our association and I look forward to working with him and the entire KBA board. In closing, may I share the final paragraph of “A Prayer for Bad Times” by Richard Cardinal Cushing in which he paralleled a sporting event to the game of life. “And when I finish the final inning, I ask for no laurels. All I want is to believe in my heart that I played as well as I could and that I didn’t let you down.”
Garland Certain
November 2010 | 9
PRODUCTS AND SERVICES America 2010: The Latest Demographic Trends Each year Bancography updates its software tools and analytic databases with current year demographics in order to most accurately describe the markets our clients serve. And each year, the demographic update reveals interesting trends about the American landscape. Several notable trends emerged in 2010.
Household Growth • Florida is no longer a growth market. As recently as 2007, six of the 25 fastest growing large counties (at least 50,000 households) in the U.S. were in Florida; in 2010 none. America’s onetime growth capital has been supplanted due to reduced immigration, deferred retirement migration (a consequence of eroded retirement savings accounts) and an uncertain real estate market. Taking its place, the Mountain states of Colorado, Utah and Wyoming each show highgrowth forecasts throughout, as do the coastal counties of the Carolinas and Georgia. Among metropolitan areas, Phoenix remains a growth magnet but former hotspots such as Riverside – San Bernardino and Las Vegas have cooled. • Despite Florida’s slowdown, growth expectations remain high in many major Southeast and Southwest metros. Raleigh – Durham, Atlanta and Nashville each rank among the nation’s fastest-growing markets, as do the Texas quartet of Dallas, Houston, Austin and San Antonio. In other regions, the Washington DC suburbs continue to show high growth prospects, hosting four of the15 fastest growing large counties; as do the Seattle and Portland metros in the Northwest. The overall U.S. household base is projected to grow by 4.8% over the next five years, well below the 7% rate that held prior to the economic downturn of 2008. November 2010 | 10
Income • Income remains sharply concentrated along the Northeast corridor, with nearly every county from Washington to Boston ranking among the top 10% of all U.S. counties in terms of affluence. In other parts of the nation, top ranking income levels are found in the San Francisco Bay Area, Portland, Seattle and Denver; in Houston and Dallas; and in the major metros of the Midwest such as Chicago and Minneapolis. Affluence is highly correlated with urbanicity, with most of the lowest-income areas spread across rural areas of the deep South, the Appalachian states and the sparsely populated West Texas – New Mexico region.
Age • America’s heartland continues to age, with the oldest regions spanning the midsection of the country through the Dakotas, Nebraska, Kansas, Oklahoma and central Texas. The coal mining communities of western Pennsylvania and West Virginia also show older household bases; as do traditional retirement hubs such as Florida, the Blue Ridge Mountains and the lakefront towns of northern Michigan. In contrast, western states such as California, Washington, Colorado and Wyoming attract younger household bases, a trait shared with major employment centers such as Atlanta, Chicago, Houston and the Northeast corridor cities.
Minority Population • The traditional U.S. melting pot appears less evident than in prior years, as minority populations remain concentrated in specific regions of the country rather
than spread across the nation. A broad corridor from southern California to Texas contains the nation’s largest Hispanic-American concentrations, while a corridor from the Mississippi Delta through central Alabama, rural Georgia and South Carolina contains the nation’s largest African-American concentrations. Three-hundred and seventy of the 3,141 U.S. counties are now “majority minority,” i.e., non-white residents (including census reporting categories Hispanic, Black, Asian, Aleut, Native American and Pacific Islander) represent more than 50% of residents. This compares to 350 counties in 2007. For detailed maps and tables showing the fastest growing counties, most affluent counties and other interesting 2010 demographic statistics, visit www. bancography.com/bancology.html. And if you need detailed information on your institution’s markets, contact us at info@ bancography.com or 205-252-6671 For More Information on this article and other KBA endorsed products and services, please contact: Selina Parrish 502.582.2453 [email protected]
119th Annual Convention Wrap-up
By: Kyle Elmore
Bankers, guests and vendors joined together at the French Lick Resort from September 18-20 to take part in the KBA’s 119th Annual Convention. The convention was packed full of dynamic speakers, informative presentations and plenty of networking opportunities. Highlights included having both Ted Koppel and Stuart Varney speak on the same day, within 8 hours of one another. It is unique to have one speaker as great as either Mr.Varney or Mr. Koppel, but two in the same day is unbelievable. The convention also saw a new chairman, Pedro Bryant, take the reins and attendees witnessed the introduction of the new KBA board members. The convention had many phenomenal speakers in addition to Mr. Koppel and Mr.Varney. Mitch Barnhart, University of Kentucky Athletic Director, made the opening remarks for the prayer breakfast. Walter Bond taught the crowd how to quit throwing pity parties and a wide range of speakers covered many hot topic issues inside the banking industry today. The convention again had a member roundtable segment that allowed attendees to interact with their peers regarding the state of the industry and give feedback to the KBA directly. The convention was once again a huge success. The KBA cannot wait to see everyone next year in Destin. November 2010 | 12
WHO’S HELPING YOU THROUGH IT? On top of a slow economy, banks now face a maze of new regulations and requirements. The Financial Institutions Services Team at Mountjoy Chilton Medley LLP specializes in helping you find your way through it all so you can stay in compliance and in the black. Call us today to see how we can help your institution.
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FRANKFORT
GOLF
Opening Reception
Prayer Breakfast
Exhibit Hall
Thank You 2010 Annual Convention Sponsors Affinion Group Alexander, Thompson, Arnold, CPAs Anthem Blue Cross Blue Shield Kentucky Arison Insurance Services, Inc. ATM Solutions, Inc. The Baker Group Baldwin CPAs, PLLC KY Banker BancInsure, Inc. TIB adNOV.Bancography 2010 7.5 xBank 5 On Hold The Bankers’ Bank of Kentucky, Inc. BBVA Compass
November 2010 | 14
BKD, LLP BSC, Inc. Computer Services, Inc. Crowe Horwath LLP Deluxe Financial Services Dynamic Card Solutions, LLC Federal Home Loan Bank of Cincinnati Fidelity National Information Services Financial Data Technology Corporation Frost Brown Todd LLC FTN Financial Housing Equity Funds of Kentucky
Investors Title Insurance Company Morgan & Pottinger, PSC Morgan Keegan & Company, Inc. Mountjoy Chilton Medley, LLP National Processing Company Norman Backues & Associates, Inc. PNC Bank, N.A. Professional Bank Services, Inc. PULSE Ross, Sinclaire & Associates Software Information Systems, Inc. Southwest Financial Services, Ltd. Stifel, Nicolaus & Company, Inc. TransUnion LLC Travelers
Mark Your Calendar
Sandestin’s naturescape is a sacred trust to be savored. With miles of biking and hiking paths amid a vast range of plantings and vegetation, the ecotourism at Bayside will leave you spellbound. Sandestin Golf and Beach resort features the largest span of bayside property in Northwest Florida, and with Bayside’s stunning area of Destin vacation rentals, the resort is an attention getter.
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Directors Chris Fralick, CPA, Russ Harris, CPA, Susan Pike, CPA and Ronnie Harris, CPA
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Education Prevent Fraud Before it Happens Fraud Protection – Debit Card and ACH Loss Prevention Seminar November 30, 2010, 9 am – 4 pm, $249 per person Republic Bank and Trust, 9600 Brownsboro Road, Louisville, Kentucky
Please join us as we explore why your sales market is local, but your fraud risk market is global and what this means to the risk management strategies, in both your plastic card portfolio, and the business accounts subject to so many new fraud attempts.
You Can’t Depend on Your Customers to Prevent Losses
The exponential growth in the use of ACH has created fraud losses that occur at break neck speed, and with huge losses. Losses are occurring at banks large and small, rural and metropolitan. No one is immune.You must ask yourself if you have the protections for both the losses, and the legal liabilities.
Operational losses attributable to fraud, specifically debit and payment channel fraud are changing right in front of our eyes, and at a pace that threatens both your accounts and the reputational integrity of your financial institution.
The UCC requires banks to have, among many other provisions “…a commercially reasonable method of providing security against unauthorized payment orders…” The question is “Do You?” Business line portfolios are traditionally viewed as a silo that must be protected, weighing the risks and rewards associated with the marketplace in which you operate. Unfortunately, the Internet and Worldwide trade are changing the rules for everyone. Requiring your customers to protect their accounts is an important part of a risk management strategy, but it must include many layers, including sufficient contracts, and robust fraud detection systems within your bank.
Online registration is available at www.kybanks.com (go to Education, then Seminars).
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Our Goal: Your Success! November 2010 | 16
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Making News Republic Bank Donates Kentucky State Fair Grand Champion Ham to West End School Republic Bank who had the co-winning high bid of $800,000 for the 2010 Kentucky State Fair’s Grand Champion Ham donated the ham to the West End School. In turn, students from the West End School along with community volunteers from Manna House served the ham sandwiches to West End residents on Tuesday, October 19, as part of the weekly community food outreach program. Starting in 2005, the West End School is now a year-round free boarding school serving the academic and residential needs of 13 middle school boys, and is located at the former Carter Elementary School at 36th and Virginia in Louisville’s West End. The West End School was founded to address the need of alternative forms of education particularly for the increas-
November 2010 | 18
ing number of children in our community who are experiencing issues of social dislocation or homelessness. Middle school age students were chosen because they are believed to be at the “tipping point” both academically and socially, and felt that a three year middle school program would provide sufficient time to remediate academic deficiencies. Manna House, located at the West End School, is supported by the New Zion Baptist Church’s Mission Council and other members of the church and serves 30 – 40 members of the community every Tuesday. New Zion Baptist Church is located at 1501 South 34th Street. “As Kentucky’s largest community bank, Republic Bank is committed to the communities in which we work and live. We are, therefore, extremely pleased to present this ham to
the West End School,”,stated Bernard Trager, founder of Republic Bank. “We are proud to partner with Republic Bank, a community-minded company. The actions of their founder, Bernard Trager, are those of a true community leader, and his donation indicates his desire to impact the lives of those in need,” stated Robert Blair, founder and administrator of the West End School. “As a community volunteer, I’ve seen first-hand the work that the West End School has done with these young men. I’m proud that Republic Bank has donated the ham to the West End School and that, in turn, the school is donating the ham to their local community,” stated Amy Trager, volunteer and wife of Steve Trager, Republic Bank’s Chairman and CEO.
First Federal Sponsors Senior Crimestoppers First Federal Bank and the Bluegrass Care and Rehabilitation Center announced today that they have partnered to bring the Senior Housing Crime Prevention Program to the residents of the Center. The Senior Crimestoppers Program provides on-going crime prevention programs designed to deter incidents of crime in long-term care and senior housing facilities. The Program will provide the Center a proven system for further preventing crime against its patients and staff including ongoing education for residents and their families and for staff members, lock boxes for the residents’ personal property and medication, access to an anonymous tip-reporting hotline, and cash rewards for information that could help the facility solve or prevent a crime.
“We do view this partnership as a way for First Federal Bank to give back to the community in a very important way,” stated William W. James, bank president. “Our commitment in this program will help further strengthen the fight against crime perpetrated on the elderly.”
The Senior Housing Crime Prevention Foundation (SHCPF) presented the Charter to Bluegrass Care and Rehabilitation Center, and to First Federal Bank, representing participation of the Center and the Bank in the Program.
“First Federal Bank’s five year commitment to this program demonstrates their belief in giving back to the community that they serve,” said George Clinard, SHCPF Vice President.
Helping Kentucky bankers invest wisely for over 20 years!
Municipals • Agencies • BABS • MBS Bill Barker 800.292.4563 [email protected] Louisville ~ Lexington ~ Cincinnati -KBA Associate MemberNovember 2010 | 19
Community Community Ventures Ventures Corporation’s Corporation’s
SBA 504 Loan Program EXCITING NEW FEDERAL LEGISLATION UPDATES Recent legislation passed by Congress and signed into law by the President adds some exciting enhancements to the SBA 504 Loan Program. • Larger Size Businesses Now Qualify – Businesses with net worth of $15M and less and net income (after federal income taxes) that averages no more than $5M over the last two years are now eligible for 504 loan financing. Previously the thresholds were $8.5M and $3M respectively. • Refinancing of Existing Debt – Community Ventures Corporation, a Certified Development Company, can partner with banks to finance maturing business debt without a business expansion project being associated with the refinancing. This new refinance rule is in effect for two years and the debt being refinanced must have been for a 504 Loan Program qualifying purpose. (Example: purchase of the business’s building) • Fee Relief – Effective October 1, 2010, and through the earlier of December 31, 2010 or when the $505 million (fee relief ) allocation is exhausted, certain fees normally paid by 504 loan borrowers and participating bank partners, are waived. • Higher Lending Limits – Community Ventures Corporation can now lend more money to business expansion and refinancing projects. Community Ventures Corporation’s loan limit (up to 40% of the total project costs) is now $5M. For small manufacturing firms and projects that meet certain energy consumption requirements, Community Ventures Corporation’s lending limit is $5.5M. Community Ventures Corporation can participate in projects as large as $12.5M and in some cases $13.75M on a day-to-day basis. • Benefits of 504 Loans to Banks – When banks partner with Community Ventures Corporation to structure business expansion and refinance deals using the SBA 504 loan, they continue to realize the following benefits:
Banks have a 1st lien position on the collateral; Community Ventures Corporation and SBA will have a 2nd lien position. Bank’s permanent financing facility will be at 50% Loan-to-Value. With the exception of term, Banks can price and structure their 1st lien loan according to their own underwriting guidelines. Banks maintain the business borrower’s deposit relationship (Community Ventures Corporation is not a depository institution.) Bank has no SBA “red tape” to deal with. Community Ventures Corporation handles that exclusively.
• Benefits of 504 Loans to Borrowers – When borrowers partner with Community Ventures Corporation to structure business expansion and refinance deals using the SBA 504 loan, they continue to realize the following benefits:
Low capital injection requirements – Typically it’s 10%, and never higher than 20% Long-term financing – 20 year term on real estate projects; 10 year term on equipment Low fixed interest rate – Current 20-year fixed interest rate is 4.5%!!
Call your local Community Ventures Corporation office today for more information!!
www.cvcky.org
Lexington - 859-231-0054 (Headquarters) 1450 N Broadway; Lexington, KY 40505
Henderson - 270-826-7196 1990 Barrett Ct; Henderson, KY 42419
Bowling Green - 270-904-0323 923 College Street; Bowling Green, KY 42101
Louisville - 502-566-6076 811 S 2nd St; Louisville, KY 40203
Campbellsville - 270-849-2323 107 W Broadway; Campbellsville, KY 42718
Paris - 859-340-4028 509 High St; Paris, KY 40361
Frankfort - 502-696-9444 975 Riverbend Rd; Frankfort, KY 40601
ON THE MOVE
Susan Forsythe
Ryan Atkins
Kentucky Bank adds two new Mortgage Lenders. Susan Forsythe has joined Kentucky Bank’s Lending Department, bringing twentyfive years of mortgage lending experience.
Kevin Welsh
Kevin Welsh has been named to the Kentucky Bank Board of Directors for Clark County, Welsh has has over 23 years of manufacturing experience in Clark County.
Ryan Atkins has also joined Kentucky Bank’s Lending Department. He brings ten years of experience in commercial, residential, and construction lending.
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Our Offices Serving Financial Institutions: Murray, Kentucky Phone: 270.753.2424 Rick Melton, CPA, PFS Milan, Tennessee Phone: 731.686.8371 Jack Matthis, CPA, CBA Dyersburg, Tennessee Phone: 731.285.7900 Steve Carmichael, CPA Glendora Greenway, CPA Kevin Howell, CPA Union City, Tennessee Phone: 731.885.3661 Judy Rainey, CPA
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Fulton, Henderson, Jackson, Martin, McKenzie, Paris & Trenton. November 2010 | 21
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M. Deane Stewart Shareholder Deane focuses his practice on finance and lending transactions and commercial real estate matters. He represents banks and other institutional lenders in senior debt financing, floor plan and dealer finance and commercial real estate loans. He has significant experience in the acquisition, disposition and leasing of real property.
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Jim is a member of the firm’s Executive Committee and a past president of the Fayette County Bar Association. A substantial amount of his practice involves representing lenders in commercial real estate loan and construction loan documentation. Jim also represents commercial landlords and documents and closes residential real estate transactions.
